The Pros and Cons of 25 Lacs Post-Tax Salary in India vs. CAD 95,000 PA in Canada for a Family of 3

Introduction

When contemplating an international move, one of the most critical factors to consider is the post-tax salary and cost of living. This piece compares the post-tax salary of 25 lacs in India to CAD 95,000 per annum in Canada, focusing on the financial benefits and challenges. Given my 9-year experience in Canada, particularly in Vancouver, BC, a city known for its more affordable cost of living compared to Toronto, ON, I can provide a practical perspective.

Financial Considerations

Let's start by comparing the post-tax salary in both countries. The Canadian figure of CAD 95,000, converted to INR, stands at approximately 5,666,404.84 as of 10th April 2021. However, as you'll see, the true value of this salary can be significantly influenced by the cost of living and associated expenses.

Cost of Living in Canada

Monthly Expenses: Rent: $2,000 (assuming a three-bedroom apartment) Cars and Insurance: $300 per month (insurance) $200 per month (installment) $150 per month (fuel) Food: $700 per month (for a family of three) Other Utilities: $1,300 per month (hydro, internet, phone, etc.)

Total Monthly Expenses: $3,350.00

Annual Expenses: $39,600.00 (12 months * $3,350.00)

Take-Home Pay in Canada

Canada has a significant tax deduction, roughly 40% of the gross salary. Therefore, from your CAD 95,000, $38,000 is taken as tax. This leaves a net salary of CAD 57,000. Considering the annual cost of living expenses amount to CAD 39,600, your saving per annum would be:

CAD 57,000 (net salary) - CAD 39,600 (cost of living) CAD 17,400 or approximately INR 1,105,542.50 after converting the Canadian dollar to Indian Rupees.

Comparing with a 25 Lacs Post-Tax Salary in India

Let's examine the same scenario in India. A post-tax salary of 25 lacs (INR 25,000,000), with the same cost of living (minus the additional expenses like car insurance and monthly installments) would result in:

Monthly Income: INR 2,083,333.33 (25,000,000 / 12)

Monthly Expenses: Assuming a family of three without car insurance and monthly installments, the monthly cost of living might be around INR 17,000 - 20,000 (rent, utilities, groceries, etc.), leading to a monthly savings of about INR 2,066,666.66.

Annual Savings: INR 24,800,000 (12 months * INR 2,066,666.66) - INR 3,000,000 (assumed annual cost of living) INR 21,800,000.

Conclusion

When deciding between the post-tax salary of 25 lacs in India versus CAD 95,000 in Canada, the final decision hinges on personal preferences and financial goals. While the Canadian salary might initially appear more generous, the high cost of living, including car insurance and monthly installments, can significantly reduce monthly savings. In India, maintaining a comfortable lifestyle without additional expenses could lead to substantial savings. It's essential to gather firsthand information from individuals currently working in these countries to make an informed decision.

Ultimately, the move to Canada or India depends on your priorities, including access to healthcare, education, and overall quality of life.